PHARMA SERVICES Sector Snapshot - Q2 2021 - Bourne Partners
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PHARMA SERVICES
Sector Snapshot
Q2 2021
Market Commentary – Debt Capital Markets
Debt Markets
2020 saw increased amounts of debt used in buyouts across Median US Buyout Multiples1
the board, resulting in the highest debt / EBITDA levels since
2014
12.7x
14.1x
16.0x
12.2x
12.0x
— The increased use of debt was driven by 2H20 back-end
11.6x
11.5x
11.1x
14.0x
10.0x
loaded lending activity (primarily 4Q20) as certainty around
9.8x
9.7x
9.4x
12.0x
8.6x
8.3x
8.2x
the U.S. election and vaccination expectations increased
7.5x
7.8x
10.0x
5.2x
6.7x
5.7x
5.6x
5.9x
5.4x
8.0x
4.4x
4.1x
3.7x
4.6x
As the effects of COVID now begin to diminish, debt markets
4.3x
4.4x 3.8x
4.5x 3.6x
6.0x
3.2x 4.3x
have recovered, signaling that lenders have become 4.0x
6.9x
6.5x
6.3x
6.0x
5.9x
5.7x
5.7x
5.7x
5.7x
5.6x
5.3x
increasingly comfortable with macroeconomic and company-
4.3x
2.0x
specific fundamentals 0.0x
— With increased confidence, lenders are currently looking to
provide strong leverage for high-quality assets, particularly Debt/EBITDA Equity/EBITDA EV/EBITDA
ones that have proven their stability through the recent
market downturn
Historical US High Yield Debt Effective Yield2
The spread on U.S. high-yield debt has returned to pre-COVID
levels 12.0% March 23 – 11.38%
10.0%
— 4.41% current effective yield compared with a 11.38%
effective yield on March 23, 2020 (peak of the pandemic) 8.0%
We expect continued activity from lenders in 2H21 due to: 6.0% 4.41%
— Pent-up demand in M&A activity driven by the impact of 4.0%
COVID 2.0%
— Increased deal activity due to pending tax legislation changes 0.0%
— Historically high levels of Private Equity dry powder
1) PitchBook, March 2021
2) Ice Data Indices, LLC, ICE BofA US High Yield Index Effective Yield [BAMLH0A0HYM2EY] Federal
Reserve Bank of St. Louis 2
Market Commentary – Private Equity
Private Equity
Portfolios have stabilized with sufficient liquidity, and in most US Private Equity Middle Market Deal Value1
cases, performance has been steadily improving since the
onset of COVID
$202.1
$250
Majority of firms have indicated that they are either willing to
$200
perform significant diligence remotely or are now willing to
$122.7
$120.3
$119.8
$118.9
$117.2
$115.1
$112.8
$107.9
$106.7
$104.8
travel for diligence meetings and site visits $150
$67.3
— Some groups have mentioned closing and funding deals $100
performing 100% virtual diligence (or their ability to), if LP $50
agreements permit
$0
— Third-party diligence providers are willing to perform the Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
majority of diligence remotely
2018 2019 2020
Private Equity firms remain willing to pay pre-COVID multiples Deal Value ($B) Estimated Deal Value ($B)
for outstanding assets due to record levels of dry powder and
heightened levels of activity in the M&A market US Private Equity Dry Powder by Maturity ($B)1
— As of March 31st, 2020 US private equity had a record level of
$679.1
$706.6
$728.4
capital overhang, exceeding $725B
$587.7
$800
$506.2
$700
$457.6
— Dry powder falling in the age range of 3-5 years was nearly
$398.4
$397.0
$393.7
$387.7
$380.0
$600
$350.0
$348.2
$347.6
$339.0
double that of 2019 ($75B) in 2020 ($141B) $500
— Due to turbulent market conditions and the fallout related to $400
COVID-19, we expect the levels of capital overhang to diminish $300
$200
substantially in 2H21 as Private Equity groups continue to
$100
deploy significant capital $0
0-2 3-5 6-7
*Returns data through 3/31/2020
1) PitchBook, March 2021 3
Market Commentary – M&A
M&A
As deal volume has steadily decreased for the past five years in both the overall market and the healthcare sector, we have
continued to see median deal size grow and expand into what could be a strong 2021
— With public equity markets reaching all time highs continually, private markets are following suit as investors/companies are looking to
deploy capital and are willing to pay a premium for strong companies
Many transactions were either pushed out or halted during the COVID-19 pandemic, leaving buyers with a solid appetite to
transact in order to meet company objectives
As the world begins to re-open and resume normal life, resurgences in key areas such as elective surgeries and medical testing
will help drive strong(er) company fundamentals and expected healthcare deal activity through the rest of 2021
Last 5 Years – All M&A Transactions1 Last 5 Years – Healthcare M&A Transactions1
23,642 2,500 2,235 $100
25,000 21,698 $60 2,055 2,059
20,362 1,779 1,795
17,868 $50 2,000 $80
20,000 16,226
$51.8 $40 1,500 $80.0
15,000 $60
$30
10,000 1,000 $40
$27.2 $29.9 $20 474
$25.1 $26.6 4,161
5,000 $20.5 $10 500 $29.9 $29.2 $20
$27.5
$21.4 $22.6
0 $0 0 $0
2016 2017 2018 2019 2020 2021 2016 2017 2018 2019 2020 2021
# of Deals Median Deal Size ($mm) # of Deals Median Deal Size ($mm)
1) PitchBook, March 2021 4
COVID-19 – M&A Process Considerations
The impact of COVID-19 has had lasting effects on the way Bourne runs and executes its M&A processes
— We are mindful of buyer health concerns and can proactively prepare to address them to ensure that we enable strong participation in
our processes to maximize competition
We have experience closing transaction processes during COVID, which has allowed us to refine and develop our approach to
how we currently manage processes
We leverage technology as much as possible to support a nearly “virtual” process, where needed
— Bourne’s diligence and preparation can be completed remotely
— Buyer outreach through indications of interest can take the traditional form of pre-COVID processes
— Roadshows and management presentations can be hosted virtually, if necessary
— Require refreshed bids after management presentations to down-select and limit in-person meetings to a reduced group of highly
motivated parties
— Prepare to support all business and third-party diligence remotely with a fully “buttoned up” virtual data room, and utilize technology to
perform as much diligence as possible
— Consider proactively commissioning diligence materials to take the place of traditional standard in person third party diligence such as
facility tours and operational reviews
— Bourne tightly manages processes and sets firm milestones for diligence phases to ensure buyers do their work on a strict timeline and
do not use inability to travel/meet in-person as an excuse to elongate processes
Representative Bourne Transactions During COVID
5
Pharma Services Sectors Remain at Historical Highs
The effects of the COVID-19 driven market rollercoaster cannot be overstated
— Most notably, in Bourne’s coverage, we witnessed the “Rebound For The Ages” as pharma services sectors bounced back to levels at or above all time
highs
Since the onset of the pandemic and through the trough in March 2020, trading values and multiples for the respective sectors covered in this
report are already re-approaching record highs or are at or above historical averages
— Although the market suffered a substantial loss in the ~4 weeks from February 21, 2020 to the lows on March 23, 2020, the indices are tracking
positive, showing significant growth from March 23, 2020 through today(1)
o CDMO and CRO indices have jumped 118% and 98%, respectively, and continue to significantly outperform the S&P 500
o The Packaging and Distribution indices have bounced 102% and 57%, respectively, and trade at strong multiples and premiums to historical
averages
The COVID-19 pandemic caused the majority of sector M&A activity in the latter half of 2020 to be either tabled or postponed, as shown in
the M&A transaction comps sets that follow
— However, M&A activity picked up significantly towards the end of the year relative to the March trough
— From our discussions, we believe there will be a healthy supply of attractive M&A opportunities continuing to come to market in 2021
o High levels of pent-up supply due to ownership forgoing sales during peak COVID-19 uncertainty
o Expected capital gains tax increases in 2022 as a result of the new presidential administration
o Conditions within both the debt and equity capital markets have returned to highly favorable pre-COVID-19 levels
While the negative impacts from the COVID-19 pandemic cannot be overstated, we believe pharmaceutical industry valuations will remain
relatively healthy, excluding a few exposed subsegments
1) As of July 19, 2021 6
Pharma Services Sectors Steady After All Time Highs (cont.)
Feb 21, Mar 23, July 19,
70.0% 2020 2020 2021
CDMO CRO 67.2%
Distribution Packaging 52.4%
50.0%
S&P 500
36.1%
30.0% 27.6%
10.0% 11.9%
-10.0%
-30.0%
-50.0%
Start of Bull Market to Start of COVID-19 Onset of COVID-19 / Sector Peaks to
From COVID-19 Trough to Present(1)
/ Sector Peaks COVID-19 Trough
March 5, 2009 to February 21, 2020 February 21, 2020 to March 23, 2020 From March 23, 2020 to July 19, 2021
o CDMO: ↑ 696% o CDMO: ↓ 23% o CDMO: ↑ 118%
o CRO: ↑ 650% o CRO: ↓ 46% o CRO: ↑ 98%
o Specialty Packaging: ↑ 493% o Specialty Packaging: ↓ 32% o Specialty Packaging: ↑ 102%
o Distribution: ↑ 247% o Distribution: ↓ 29% o Distribution: ↑ 57%
o S&P 500: ↑ 389% o S&P 500: ↓ 33% o S&P 500: ↑ 90%
1) As of July 19, 2021; Returns weighted by index constituents market cap 7
Pharma Services Sectors Steady After All Time Highs (cont.)
Prior to COVID-19, valuation multiples across most Pharma Services sectors were at or near historic highs
Contract Service providers continue to enjoy numerous tailwinds and drivers of organic growth
Of note, since the onset of the pandemic in late February through today(1):
— The enormous increases across most of the indices above during the 11-year bull market, as well as the record rebound over 2H 2020 and beyond,
only further underscore the swift and dramatic loss in market value in March due to the COVID-19 outbreak
In terms of M&A/consolidation activity and valuations we foresee:
— An increase in supply of quality acquisition opportunities coming to market, due in large part to healthy valuation multiples across the Pharma
Services sub sectors and pending tax legislation that could impact realized gain for a seller
— Buyers will continue to see increased competition and multiples to win quality assets in sell side auctions as the investing world becomes more
comfortable with these heightened multiples
Despite the pandemic, in terms of EV/EBITDA multiples, the proceeding M&A transaction comps sets illustrate that each of the Pharma Services sectors
continue to trade at healthy multiples, re-approaching their all-time highs or are at or above historical averages
Pharma Services EV / EBITDA (LTM) Multiples
S&P 500 CDMO CRO Distribution Specialty Packaging
10-Year Peak 19.0x (Apr 2021) 27.0x (Oct 2020) 24.0x (Jul 2021) 14.9x (Apr 2015) 12.0x (Jul 2017)
10-Year Average 11.3x 15.1x 16.3x 10.1x 9.6x
End Q2 2021 17.5x 19.3x 23.4x 8.7x 11.3x
Today(1) 17.6x 19.9x 23.4x 8.6x 11.1x
1) As of July 19, 2021 8
Valuation Trends – LTM
Historical Total Enterprise Value / EBITDA (LTM) Multiples
30.0x
25.0x
23.4x
20.0x 19.9x
17.6x
15.0x
11.1x
10.0x
8.6x
5.0x
CDMO CRO Distribution Packaging S&P 500
The CDMO and CRO sector EV/EBITDA (LTM) multiples are trading at significant premiums to the S&P 500 (~13% and ~33.4%, respectively),
while the Packaging and Distribution sectors continue to trade at healthy multiples
CDMO basket consists of: Bachem (SWX:BANB), Balchem (NasdaqGS:BCPC), Catalent (NYSE:CTLT), Eurofins Scientific SE (ENXTPA:ERF), Johnson Matthey Plc (LSE:JMAT), Lonza (SWX:LONN), Siegfried
(SWX:SFZN), Thermo Fisher Scientific Inc. (NYSE:TMO), and West Pharmaceutical Services, Inc. (NYSE:WST)
CRO basket consists of: Charles River Laboratories International (NYSE:CRL), ICON (NasdaqGS:ICLR), IQVIA (NYSE:IQV), Medpace (NasdaqGS:MEDP), PPD, Inc. (NasdaqGS:PPD), and Syneos Health, Inc.
(NasdawGS:SYNH)
Distribution basket consists of: AmerisourceBergen Corporation (NYSE:ABC), Cardinal Health (NYSE:CAH), Henry Schein (NasdaqGS:HSIC), McKesson Europe (HMSE:CLS1), McKesson (NYSE:MCK), Owens &
Minor (NYSE:OMI), Patterson Companies (NasdaqGS:PDCO), and UDG Healthcare (LSE:UDG)
Packaging basket consists of: Amcor Limited (ASX:AMC), AptarGroup, Inc. (NYSE:ATR), Berry Global Group, Inc. (NYSE:BERY), CCL Industries Inc. (TSX:CCL.B), Gerresheimer AG (DB:GXI), Mondi plc (LSE:MNDI),
Sonoco Products Company (NYSE:SON), West Pharmaceutical Services, Inc. (NYSE:WST), WestRock Company (NYSE:WRK), and Winpak Ltd. (TSX:WPK)
Source: S&P Capital IQ as of July 19, 2021; Multiples weighted by market cap 9
Valuation Trends – Last 3 Years
Historical Total Enterprise Value / EBITDA (LTM) Multiples
30.0x
CDMO CRO
Distribution Packaging
25.0x
S&P 500
23.4x
20.0x 19.9x
17.6x
15.0x
11.1x
10.0x
8.6x
5.0x
CDMO basket consists of: Bachem (SWX:BANB), Balchem (NasdaqGS:BCPC), Catalent (NYSE:CTLT), Eurofins Scientific SE (ENXTPA:ERF), Johnson Matthey Plc (LSE:JMAT), Lonza (SWX:LONN), Siegfried
(SWX:SFZN), Thermo Fisher Scientific Inc. (NYSE:TMO), and West Pharmaceutical Services, Inc. (NYSE:WST)
CRO basket consists of: Charles River Laboratories International (NYSE:CRL), ICON (NasdaqGS:ICLR), IQVIA (NYSE:IQV), Medpace (NasdaqGS:MEDP), PPD, Inc. (NasdaqGS:PPD), and Syneos Health, Inc.
(NasdawGS:SYNH)
Distribution basket consists of: AmerisourceBergen Corporation (NYSE:ABC), Cardinal Health (NYSE:CAH), Henry Schein (NasdaqGS:HSIC), McKesson Europe (HMSE:CLS1), McKesson (NYSE:MCK), Owens &
Minor (NYSE:OMI), Patterson Companies (NasdaqGS:PDCO), and UDG Healthcare (LSE:UDG)
Packaging basket consists of: Amcor Limited (ASX:AMC), AptarGroup, Inc. (NYSE:ATR), Berry Global Group, Inc. (NYSE:BERY), CCL Industries Inc. (TSX:CCL.B), Gerresheimer AG (DB:GXI), Mondi plc (LSE:MNDI),
Sonoco Products Company (NYSE:SON), West Pharmaceutical Services, Inc. (NYSE:WST), WestRock Company (NYSE:WRK), and Winpak Ltd. (TSX:WPK)
Source: S&P Capital IQ as of July 19, 2021; Multiples weighted by market cap 10Valuation Trends (Current, 3 Year, & LTM Comparisons)
Below are the current EV / EBITDA (LTM) multiples for each sector:
— CDMO: 19.8x (13.0% above current S&P multiples)
— CRO: 23.4x (33.4% above current S&P multiples)
— Specialty Packaging: 11.1x (36.7% below current S&P multiples)
— Distribution: 8.6x (50.9% below current S&P multiples)
— S&P 500: 17.6x
Below are the average EV / EBITDA (LTM) multiples for each sector over the last 3 years:
— CDMO: 20.2x (43.2% above average S&P multiples)
— CRO: 18.6x (31.8% above average S&P multiples)
— Specialty Packaging: 10.0x (28.8% below average S&P multiples)
— Distribution: 9.2x (35.1% below average S&P multiples)
— S&P 500: 14.1x
Below are the % change in EV / EBITDA (LTM) multiples for each sector over the last 3 years (and LTM):
— CDMO: +7.8% (down 21.8% in the last 12 months)
— CRO: +28.6% (up 27.7% in the last 12 months)
— Specialty Packaging: 7% (up 10.8% in the last 12 months)
— Distribution: -9.5% (down 8.3% in the last 12 months)
— S&P 500: +35.8% (up 21.0% in the last 12 months)
Source: S&P Capital IQ as of July 19, 2021 11Contact Us
Bourne Partners is Comprised of Experienced Investment Professionals, Healthcare Executives, and Operating Partners
Banks Bourne Minor Hinson Jeremy Johnson Xan Smith Calli Lewis Todd Bokus Chris Inklebarger Robert Stanley
Chief Executive Officer Chief Investment Officer Managing Director Managing Director Chief of Staff Vice President Chief Operating Officer Vice President
Over 70 years of combined pharmaceutical, biotechnology, medical device, healthcare and pharma services, and consumer health/OTC
experience
Over 100 years of combined investment banking and private equity transaction experience
Transactions completed in more than 35 countries
Mergers & Acquisitions* Distribution Agreements Strategy Consulting
Licensing Agreements Corporate Spin-offs* Fund Management
Product Divestitures* Capital Raising* Direct Investing
Office Information
j Contact Details
j
j
550 South Caldwell Street, Suite 900 Xan Smith
Charlotte, North Carolina 28202 Managing Director, BD
www.bourne-partners.com Office: 704-714-8351
Tel: 704-552-8407 Mobile: 910-585-1793
Fax: 704-714-8363 xsmith@bourne-partners.com
* Investment Banking services are offered by Bourne Partners Securities, LLC, a registered broker dealer,
Member FINRA and SIPC. 121.Appendix
13CDMO – M&A Transaction Comps
CDMO – M&A Transaction Comps
USD in millions
Geographic EV / LTM EV / LTM
Announced Date Target Target Description Buyer Location Enterprise Value LTM Revenue LTM EBITDA Revenue EBITDA
IntegrityBio is a CDMO focused on the formulation and GMP filling of
Jul-21 Integrity Bio Curia (formerly AMRI) USA NA NA NA NA NA
biologics
Manufactures drug product formulations and pharmaceutical products for
Jun-21 Vetio Swedencare AB USA $181.1 $32.3 $6.5 5.6x 27.9x
animal health
Feb-21 Cognate Bioservices Cognate Bioservices operates as a cell and gene therapy CDMO Charles River Laboratories USA 875.0 125.0 NA 7.0x⁽¹⁾ NA
Avomeen operates as a contract research, and contract development and
Feb-21 Avomeen Element Materials Technology Group USA NA NA NA NA NA
manufacturing organization
Jan-21 CoreRx CoreRx is a CDMO with a focus on clinical phase drug product development NovaQuest Capital USA NA NA NA NA NA
Jan-21 Catalent BFS Sterile CDMO Business Division of Catalent providing blow-fill-seal ("BFS") CDMO services SK Capital Partners USA 350.0 NA NA NA NA
Provides contract development and manufacturing solutions to the
Dec-20 Recipharm EQT Partners Sweden 4,066.5 1,354.5 230.4 3.0x 17.6x
pahrmaceutical industry internationally
Adare develops, manufactures, and markets pharmaceutical technologies
Sep-20 Adare Pharmaceuticals, Inc. Frazier; Thomas H. Lee Partners USA NA NA NA NA NA
for customers worldwide
PCI provides integrated pharmaceutical development and manufacturing Kohlberg; Mubadala Investment
Aug-20 PCI Pharma Services USA NA NA NA NA 20.0x
services globally Company
Berkshire Sterile Manufacturing operates as a contract manufacturer of
Aug-20 Berkshire Sterile Manufacturing Sharp Corporation USA 150.0 NA NA NA NA
sterile drugs
Piramal Pharma, a Piramal Enterprises subsidiary, manufactures and sells
Jun-20 Piramal Pharma The Carlyle Group India 2,775.0⁽²⁾ 738.7⁽²⁾ NA 3.8x NA
bulk drugs and formulations
Majority of Drug Delivery Business of Comprises development and manufacturing operations for pharma products
Dec-19 Altaris Capital Partners USA 650.0 380.0 NA 1.7x NA
3M using inhalation, microneedle, and conventional drug delivery technologies
One-stop developer and manufacturer of drugs and premium delivery
Dec-19 Consort Medical Recipharm United Kingdom 800.0 392.7 59.7 2.1x 13.6x
devices internationally
Operates as a CDMO for the development and commercialization of new
Aug-19 Cambrex Corporation Permira Advisers USA 2,545.2 574.1 152.5 4.4x 16.7x
and generic therapeutics worldwide
Operates as a CDMO that focuses on the development and manufacturing
Apr-19 Paragon Bioservices⁽³⁾ Catalent Pharma Solutions USA 1,180.8 101.0 56.0 11.7x 21.1x
of biopharmaceuticals
Notes:
NA - Not Available Median $837.5 $386.4 $59.7 4.1x 18.8x
1) EW Healthcare Partners Mean 1,357.3 462.3 101.0 4.9x 19.5x
2) Derived from Business Today article covering the transaction Min 150.0 32.3 6.5 1.7x 13.6x
3) “Biopharma Dive”: 2018 Revenue Estimate; “Catalent : Paragon Gene Therapy Acquisition Max 4,066.5 1,354.5 230.4 11.7x 27.9x
Fuels Further High-Growth High-Margin Biologics Mix Shift, As LT Targets Are Increased –
ALERT”: 2018 EBITDA Estimate
Source: S&P Capital IQ as of July 19, 2021 14CRO – M&A Transaction Comps
CRO – M&A Transaction Comps
USD in millions
Geographic
Announced Date Target Target Description Buyer Location Enterprise Value LTM Revenue LTM EBITDA EV / LTM Revenue EV / LTM EBITDA
Pyxant is a bioanalytical CRO, providing analytical research, development, and
Jul-21 Pyxant Labs ArchiMed SAS USA NA NA NA NA NA
validation services
CRO providing clinical development services to pharamceutical, biotech, and
Jun-21 Quartesian Summit Partners USA NA NA NA NA NA
medical device companies
CRO which engages in the clinical trials within the dietary supplement,
May-21 KGK Science Myconic Capital Canada $12.7 $3.6 NA 3.5x NA
functional food, and natural product industries
CRO poviding outsourced clinical development and data solution services to
Feb-21 PRA Health Sciences ICON Public Limited Company USA 12,277.4 3,183.4 $469.0 3.9x 26.2x
biotech and pharma companies
Early phase CRO providing early phase clinical research and development
Feb-21 Altasciences Company Novo Holdings A/S Canada NA NA NA NA NA
services to biopharma and generic companies
Avomeen operates as a contract research, and contract development and
Feb-21 Avomeen Element Materials Technology Group USA NA NA NA NA NA
manufacturing organization
Prolytic is a CRO providing bioanalytics and pharmacokinetics to clients in the
Sep-20 Prolytic Kymos Pharma Services Germany NA NA NA NA NA
pharmaceutical sector
Sep-20 XenoGesis XenoGesis is a laboratory-based CRO Sygnature Discovery Limited United Kingdom NA NA NA NA NA
The company provides regulatory consulting, laboratory testing, clinical
Sep-20 North American Science Associates ArchiMed USA NA NA NA NA NA
research, and compliance services
Biotranex offers drug metabolism, transport, pharmacokinetic, and analytical
Apr-20 Biotranex Frontage Laboratories USA NA NA NA NA NA
services
Feb-20 MedPass MedPass is a medical device CRO ICON France NA NA NA NA NA
Sep-19 Site Business of BioClinica AES acquired the clinical sites business from Bioclinica Accelerated Enrollment Solutions (AES) USA 50.4 NA NA NA NA
Contract research laboratory that provides a range of preclinical services to the
Feb-19 Citoxlab Charles River Laboratories International France 510.0 NA 36.7 NA 13.8x
pharma industry
Full-service, clinical CRO that focuses on oncology, vaccines, and general
Mar-18 Accelovance Linical USA USA 32.9 26.8 NA 1.2x NA
medicine
Feb-18 MPI Research Provides preclinical and early clinical contract research services Charles River Laboratories International USA 800.0 240.0 68.4 3.3x 11.7x
SMO providing solutions to CROs and pharmaceutical, biotechnology, and
Sep-17 Optimal Research Synexus USA NA NA NA NA NA
medical device companies
Jul-17 MAPI Development Non-clinical CRO that provides mission-critical research services and products ICON France 139.5 NA NA NA NA
Outsourcing services company that provides clinical research, consulting, and
Jun-17 PAREXEL International Pamplona Capital Management USA 5,007.4 2,097.0 342.8 2.4x 14.6x
commercialization
Notes: Median $324.8 $240.0 $205.6 3.3x 14.2x
NA - Not Available Mean 2,353.8 1,110.2 229.2 2.9x 16.6x
Min 12.7 3.6 36.7 1.2x 11.7x
Max 12,277.4 3,183.4 469.0 3.9x 26.2x
Source: S&P Capital IQ as of July 19, 2021 15Specialty Packaging – M&A Transaction Comps
Specialty Packaging – M&A Transaction Comps
USD in millions
Geographic Enterprise EV / LTM EV / LTM
Announced Date Target Target Description Buyer Location Value LTM Revenue LTM EBITDA Revenue EBITDA
Provides packaging and labeling solutions to the healthcare and
Jul-21 MedLit Graphics TCG Legacy USA NA NA NA NA NA
pharmaceutical industries
Inno4Life manufactures pharmaceutical packaging equipment and
Apr-20 Inno4Life Dietrich Engineering Consultants Netherlands NA NA NA NA NA
provides pharmaceutical services
Bellwyck provides packaging and labeling for the clinical trial and
Feb-20 Bellwyck Pharma Services PCI Pharma Services Canada NA NA NA NA NA
commercial drug markets
Oct-19 Winpak Control Group Offers printed packaging solutions Winpak USA $42.2 $25.0 NA 1.7x NA
Pregis Corporation markets and supplies protective and specialty
Jun-19 Pregis Corporation Warburg Pincus USA 1,300.0 NA NA NA NA
packaging solutions
Three Flexible Packaging Plants in the Nelipak acquired Three Flexible Packaging Plants in the United
Jun-19 Nelipak Corporation United Kingdom 394.0 170.0 NA 2.3x NA
UK and Ireland of Amcor plc Kingdom and Ireland
Three manufacturing facilities of Provides packaging for med devices; 3 facilities in EU previously
Apr-19 Tekni-Plex USA 215.0 100.0 NA 2.2x NA
Amcor owned by Bemis
Designs plastic packaging for end markets, including the food,
Jan-19 RPC Group Apollo Management United Kingdom 5,786.7 4,855.0 $730.2 1.2x 7.9x
beverage, personal care, and healthcare markets
Manufactures and supplies recycled paperboard and converted
Dec-18 Caraustar Industries Greif Packaging USA 1,800.0 1,376.0 174.0 1.3x 10.3x
paperboard products
Manufactures and sells packaging products in medical and
Aug-18 Bemis Company Amcor USA 6,777.9 4,099.4 573.0 1.7x 11.8x
pharmaceutical markets globally
Jul-18 CSP Technologies Manufactures and distributes custom polymeric products AptarGroup USA 529.4 140.0 40.7 3.8x 13.0x
Specialty paper and packaging company in North America that
Jul-18 Expera Specialty Solutions Ahlstrom-Munksjo AB USA 615.0 721.0 66.0 0.9x 9.3x
offers food packaging papers
Manufactures and sells paper and corrugated cardboard
Jun-18 Papeles y Cartones de Europa DS Smith Spain 2,100.6 1,049.5 203.6 2.0x 10.3x
packaging products in Europe
Designs and manufactures molded and fabricated foam and
Jan-18 Foam Fabricators Compass Diversified Holdings USA 247.5 126.0 30.0 2.0x 8.3x
packaging products
Notes:
NA - Not Available Median $615.0 $445.5 $174.0 1.8x 10.3x
Mean 1,800.8 1,266.2 259.6 1.9x 10.1x
Min 42.2 25.0 30.0 0.9x 7.9x
Max 6,777.9 4,855.0 730.2 3.8x 13.0x
Source: S&P Capital IQ as of July 19, 2021 16Distribution – M&A Transaction Comps
Distribution – M&A Transaction Comps
USD in millions
Announced Geographic EV / LTM EV / LTM
Date Target Target Description Buyer Location Enterprise Value LTM Revenue LTM EBITDA Revenue EBITDA
Engages in the wholesale distribution of pharmaceutical, medical,
Australian Pharmaceutical Industries
Jul-21 healthy, beauty, and lifestyle products to pharmacies primarily in Wesfarmers Limited Australia $769.3 $3,060.5 $89.4 0.3x 8.6x
Limited
Australia
Hygis distributes pharmaceuticals and is based in Morges,
Apr-20 Hygis Karo Pharma Switzerland 1.3 NA NA NA NA
Switzerland
Aug-19 PCX International PCX operates as a courier service agency in clinical trial industry Marken Limited Japan NA NA NA NA NA
HRTL Logistic SRL offers courier services to the clinical trials
HRTL Logistic / HETO Transport /
Jul-19 industry. HETO Transport and DER KURIER offer clinical trial Marken Limited Italy NA NA NA NA NA
DER KURIER
shipment
Aquilant Limited distributes and sells IV therapy, regional
Aug-18 Aquilant anesthesia and pain management products, and other devices for H2 Equity Partners United Kingdom 26.7 94.5 NA 0.3x NA
the medical and scientific sectors
Distributes and supplies healthcare products and business
Nov-17 H. D. Smith AmerisourceBergen USA 815.0 NA NA NA NA
solutions to manufacturers and healthcare providers
Distributes pharmaceutical products, medical devices, and
Nov-17 Cardinal Health (L) Shanghai Pharma Century Global Malaysia 557.0 3,845.7 83.3 0.1x 6.7x
specialty pharmaceuticals to pharmacies and hospitals
Engages in the trade of pharmaceuticals, cosmetics, and
Korporacja Inwestycyjna Polskiej
Mar-17 Pelion parapharmaceuticals, operating through wholesale, retail, services, Poland 323.4 2,399.5 31.5 0.1x 10.3x
Farmacji
and other segments
Distributes generic, branded, specialty, and over-the-counter
Aug-16 Anda Teva Pharmaceutical Industries USA 500.0 NA NA NA NA
pharmaceutical products
Distributes generic drugs for privately insured individuals, offering
Jul-16 Pharmapar Alliance Pharma Canada 11.1 17.3 NA 0.6x NA
a range of medication types
May-16 Symmetry Surgical Manufactures and distributes medical devices worldwide RoundTable Healthcare Partners USA 129.5 84.1 9.1 1.5x 14.2x
Operates a network of retail pharmacy stores in Canada, offering
Mar-16 Rexall Pharma Plus prescription centers that focus primarily on prescription and OTC McKesson Canada Corporation Canada 2,154.3 2,000.0 200.0 1.1x 11.1x
products
Notes: Median $411.7 $2,000.0 $83.3 0.3x 10.3x
NA - Not Available Mean 528.7 1,643.1 82.7 0.6x 10.2x
NM - Not Meaningful Min 1.3 17.3 9.1 0.1x 6.7x
Max 2,154.3 3,845.7 200.0 1.5x 14.2x
Source: S&P Capital IQ as of July 19, 2021 17CDMO – Public Company Trading Comps
CDMO – Public Company Trading Comps
USD in millions
7/19/2021 LTM Margin Analysis Enterprise Value/ Debt/
Enterprise Gross Enterprise Equity
Company Ticker Value Sales EBITDA EBIT Profit EBITDA EBIT Sales EBITDA EBIT Value Value EBITDA
Bachem Holding AG SWX:BANB $8,920.3 $454.4 $135.1 $109.3 32.1% 29.7% 24.0% 19.6x 66.0x 81.6x 1.4% 1.4% 0.9x
Balchem Corporation NasdaqGS:BCPC 4,268.6 714.9 168.3 117.5 31.8% 23.5% 16.4% 6.0x 25.4x 36.3x 3.9% 4.0% 1.0x
Catalent, Inc. NYSE:CTLT 21,055.6 3,757.4 875.8 593.4 33.2% 23.3% 15.8% 5.6x 24.0x 35.5x 15.4% 17.1% 3.7x
Eurofins Scientific SE ENXTPA:ERF 26,397.6 6,653.0 1,558.4 1,106.3 26.0% 23.4% 16.6% 4.0x 16.9x 23.9x 14.6% 16.3% 2.5x
Johnson Matthey Plc LSE:JMAT 8,995.1 21,591.7 914.8 702.6 6.5% 4.2% 3.3% 0.4x 9.8x 12.8x 21.1% 24.0% 2.1x
Lonza Group Ltd SWX:LONN 56,927.9 5,095.2 1,575.6 1,096.4 41.3% 30.9% 21.5% 11.2x 36.1x 51.9x 7.6% 8.2% 2.8x
Siegfried Holding AG SWX:SFZN 4,042.6 955.1 151.3 90.1 20.9% 15.8% 9.4% 4.2x 26.7x 44.9x 3.9% 4.0% 1.0x
Thermo Fisher Scientific Inc. NYSE:TMO 218,082.2 35,894.0 12,390.0 10,018.0 51.5% 34.5% 27.9% 6.1x 17.6x 21.8x 8.6% 9.1% 1.5x
West Pharmaceutical Services, Inc. NYSE:WST 27,226.3 2,326.1 626.2 514.0 37.5% 26.9% 22.1% 11.7x 43.5x 53.0x 1.2% 1.2% 0.5x
Median 32.1% 23.5% 16.6% 6.0x 25.4x 36.3x 7.6% 8.2% 1.5x
Mean 31.2% 23.6% 17.5% 7.6x 29.6x 40.2x 8.6% 9.5% 1.8x
Min 6.5% 4.2% 3.3% 0.4x 9.8x 12.8x 1.2% 1.2% 0.5x
Max 51.5% 34.5% 27.9% 19.6x 66.0x 81.6x 21.1% 24.0% 3.7x
The median EV multiples for CDMOs at the end of Q3 were 6.0x and 25.4x for LTM Sales and EBITDA, respectively
Source: S&P Capital IQ as of July 19, 2021 18CRO – Public Company Trading Comps
CRO – Public Company Trading Comps
USD in millions
7/19/2021 LTM Margin Analysis Enterprise Value/ Debt/
Enterprise Gross Enterprise Equity
Company Ticker Value Sales EBITDA EBIT Profit EBITDA EBIT Sales EBITDA EBIT Value Value EBITDA
Charles River Laboratories International NYSE:CRL $20,948.4 $3,041.4 $717.7 $478.5 37.3% 23.6% 15.7% 6.9x 29.2x 43.8x 11.5% 12.6% 3.3x
ICON Public Limited Company NasdaqGS:ICLR 10,921.5 2,940.4 499.0 431.8 28.6% 17.0% 14.7% 3.7x 21.9x 25.3x 3.9% 3.7% 0.9x
IQVIA Holdings Inc. NYSE:IQV 56,547.6 12,014.0 1,981.0 954.0 33.7% 16.5% 7.9% 4.7x 28.5x 59.3x 22.3% 27.3% 6.4x
Linical Co., Ltd. TSE:2183 192.6 92.9 8.0 4.1 26.9% 8.6% 4.4% 2.1x 24.2x 46.9x 22.0% 21.6% 5.3x
Medpace Holdings, Inc. NasdaqGS:MEDP 6,142.5 955.0 199.3 179.1 61.6% 20.9% 18.8% 6.4x 30.8x 34.3x 2.1% 2.1% 0.7x
PPD, Inc. NasdaqGS:PPD 19,813.2 4,987.4 854.4 568.5 65.0% 17.1% 11.4% 4.0x 23.2x 34.9x 22.7% 27.8% 5.3x
Syneos Health, Inc. Nasdaq:SYNH 11,862.0 4,461.2 587.5 363.4 23.4% 13.2% 8.1% 2.7x 20.2x 32.6x 26.8% 35.5% 5.4x
Median 33.7% 17.0% 11.4% 4.0x 24.2x 34.9x 22.0% 21.6% 5.3x
Mean 39.5% 16.7% 11.6% 4.3x 25.4x 39.6x 15.9% 18.7% 3.9x
Min 23.4% 8.6% 4.4% 2.1x 20.2x 25.3x 2.1% 2.1% 0.7x
Max 65.0% 23.6% 18.8% 6.9x 30.8x 59.3x 26.8% 35.5% 6.4x
The median EV multiples for CROs were 4.0x and 24.2x for LTM Sales and EBITDA, respectively
Source: S&P Capital IQ as of July 19, 2021 19Specialty Packaging – Public Company Trading Comps
Specialty Packaging – Public Company Trading Comps
USD in millions
7/19/2021 LTM Margin Analysis Enterprise Value/ Debt/
Enterprise Gross Enterprise Equity
Company Ticker Value Sales EBITDA EBIT Profit EBITDA EBIT Sales EBITDA EBIT Value Value EBITDA
Amcor plc ASX:AMC $23,701.4 $12,549.5 $1,967.9 $1,410.8 21.6% 15.7% 11.2% 1.9x 12.0x 16.8x 29.8% 40.7% 3.6x
AptarGroup, Inc. NYSE:ATR 9,908.0 2,984.5 605.5 378.5 37.0% 20.3% 12.7% 3.3x 16.4x 26.2x 11.6% 12.8% 1.9x
Berry Global Group, Inc. NYSE:BERY 18,796.4 12,424.0 2,290.0 1,447.0 21.0% 18.4% 11.6% 1.5x 8.2x 13.0x 58.7% 128.0% 4.8x
CCL Industries Inc. TSX:CCL.B 10,469.9 4,209.7 870.1 626.5 28.7% 20.7% 14.9% 2.5x 12.0x 16.7x 15.1% 16.8% 1.8x
Gerresheimer AG DB:GXI 1,275.8 1,750.6 361.2 191.6 30.6% 20.6% 10.9% 0.7x 3.5x 6.7x 108.7% NM 3.8x
Mondi plc LSE:MNDI 14,894.4 8,150.5 1,614.7 1,091.1 44.8% 19.8% 13.4% 1.8x 9.2x 13.7x 17.9% 21.0% 1.6x
Sonoco Products Company NYSE:SON 8,024.4 5,287.5 743.7 487.6 20.0% 14.1% 9.2% 1.5x 10.8x 16.5x 24.8% 30.1% 2.7x
West Pharmaceutical Services, Inc. NYSE:WST 27,226.3 2,326.1 626.2 514.0 37.5% 26.9% 22.1% 11.7x 43.5x 53.0x 1.2% 1.2% 0.5x
WestRock Company NYSE:WRK 22,134.6 17,547.1 2,655.3 1,225.7 17.9% 15.1% 7.0% 1.3x 8.3x 18.1x 43.8% 75.9% 3.7x
Winpak Ltd. TSX:WPK 1,431.4 863.7 191.7 146.3 30.7% 22.2% 16.9% 1.7x 7.5x 9.8x 1.0% 0.7% 0.1x
Median 29.6% 20.0% 12.2% 1.7x 10.0x 16.6x 21.3% 21.0% 2.3x
Mean 29.0% 19.4% 13.0% 2.8x 13.1x 19.0x 31.3% 36.4% 2.5x
Min 17.9% 14.1% 7.0% 0.7x 3.5x 6.7x 1.0% 0.7% 0.1x
Max 44.8% 26.9% 22.1% 11.7x 43.5x 53.0x 108.7% 128.0% 4.8x
The median EV multiples for Specialty Packaging were 1.7x and 10.0x for LTM Sales and EBITDA, respectively
— The constituents of the Specialty Packaging comparables set are not true service providers, as they are predominantly manufacturers of
packaging solutions
Source: S&P Capital IQ as of July 19, 2021 20Distribution – Public Company Trading Comps
Distribution – Public Company Trading Comps
USD in millions
7/19/2021 LTM Margin Analysis Enterprise Value/ Debt/
Enterprise Gross Enterprise Equity
Company Ticker Value Sales EBITDA EBIT Profit EBITDA EBIT Sales EBITDA EBIT Value Value EBITDA
AmerisourceBergen Corporation NYSE:ABC $23,791.2 $196,282.3 $2,754.3 $2,349.8 2.8% 1.4% 1.2% 0.1x 8.6x 10.1x 29.8% 30.3% 2.6x
Cardinal Health, Inc. NYSE:CAH 19,486.1 156,570.0 2,713.0 1,885.0 4.4% 1.7% 1.2% 0.1x 7.2x 10.3x 34.5% 41.4% 2.5x
Henry Schein, Inc. NasdaqGS:HSIC 11,241.1 10,615.2 785.6 597.7 27.9% 7.4% 5.6% 1.1x 14.3x 18.8x 8.9% 9.7% 1.3x
McKesson Europe AG HMSE:CLS1 6,516.5 18,810.5 202.5 90.7 10.9% 1.1% NM 0.3x NM NM 26.0% 28.7% 8.4x
McKesson Corporation NYSE:MCK 32,415.3 238,228.0 4,005.0 3,118.0 5.0% 1.7% 1.3% 0.1x 8.1x 10.4x 29.5% 32.8% 2.4x
Owens & Minor, Inc. NYSE:OMI 4,471.0 8,684.0 457.9 375.8 16.8% 5.3% 4.3% 0.5x 9.8x 11.9x 24.9% 32.6% 2.4x
Patterson Companies, Inc. NasdaqGS:PDCO 3,487.9 5,912.1 292.8 213.9 20.4% 5.0% 3.6% 0.6x 11.9x 16.3x 21.0% 25.3% 2.5x
UDG Healthcare plc LSE:UDG 3,836.6 1,247.0 193.2 138.7 32.6% 15.5% 11.1% 3.1x 19.9x 27.7x 9.9% 10.3% 2.0x
NM - Not Meaningful Median 13.8% 3.3% 3.6% 0.4x 9.8x 11.9x 25.4% 29.5% 2.5x
Mean 15.1% 4.9% 4.1% 0.7x 11.4x 15.1x 23.1% 26.4% 3.0x
Min 2.8% 1.1% 1.2% 0.1x 7.2x 10.1x 8.9% 9.7% 1.3x
Max 32.6% 15.5% 11.1% 3.1x 19.9x 27.7x 34.5% 41.4% 8.4x
The median EV multiples for Distribution were 0.4x and 9.8x for LTM Sales and EBITDA, respectively
Source: S&P Capital IQ as of July 19, 2021 21Bourne Industry Coverage vs. S&P 500 – EV/EBITDA (LTM)
Post-COVID was a true “Rebound For The Ages” across all of Bourne’s sectors of coverage
— Across all of our coverage, CDMOs and CROs continue to lead the way in terms of EV/EBITDA (LTM) multiples (19.9x and 23.4x, respectively), while each
of our coverage sectors are still trading at very healthy multiples
30.0x CDMO CRO Pharma Big Pharma Consumer Health / OTC S&P 500
25.0x
23.4x
20.0x 19.9x
17.6x
15.0x 15.4x
13.8x
11.3x
10.0x
CDMO basket consists of: Bachem (SWX:BANB), Balchem (NasdaqGS:BCPC), Catalent (NYSE:CTLT), Eurofins Scientific SE (ENXTPA:ERF), Johnson Matthey Plc (LSE:JMAT), Lonza (SWX:LONN), Siegfried (SWX:SFZN),
Thermo Fisher Scientific Inc. (NYSE:TMO), and West Pharmaceutical Services, Inc. (NYSE:WST)
CRO basket consists of: Charles River Laboratories International (NYSE:CRL), ICON (NasdaqGS:ICLR), IQVIA (NYSE:IQV), Medpace (NasdaqGS:MEDP), PPD, Inc. (NasdaqGS:PPD), and Syneos Health, Inc.
(NasdawGS:SYNH)
Pharma basket consists of: Almirall (BME:ALM), Amphastar Pharmaceuticals (NasdaqGS:AMPH), Assertio Therapeutics (NasdaqGS:ASRT), Bausch Health Companies (NYSE:BHC), H. Lundbeck (CPSE:LUN), Hikma
Pharmaceuticals (LSE:HIK), Horizon Therapeutics (NasdaqGS:HZNP), Indivior (LSE:INDV), Ipsen (ENXTPA:IPN), Jazz Pharmaceuticals (NasdaqGS:JAZZ), Lannett Company (NYSE:LCI), Lupin (BSE:500257), Nichi-Iko
Pharmaceutical Co. (TSE:4541), Perrigo Company (NYSE:PRGO), Recordati Industria Chimica e Farmaceutica (BIT:REC), Sun Pharmaceutical Industries (NSEI:SUNPHARMA), Takeda Pharmaceutical Company
(TSE:4502), Taro Pharmaceutical Industries (NYSE:TARO), Teva Pharmaceutical Industries (NYSE:TEVA), and UCB (ENXTBR:UCB)
Big Pharma basket consists of: Abbott Laboratories (NYSE:ABT), AbbVIe (NYSE:ABBV), AstraZeneca (LSE:AZN), Bayer Aktiengesellschaft (XTRA:BAYN), Bristol-Myers Squibb (NYSE:BMY), Eli Lilly & Company
(NYSE:LLY), GlaxoSmithKline (LSE:GSK), Johnson & Johnson (NYSE:JNJ), Merck & Co. (NYSE:MRK), Novartis AG (SWX:NOVN), Novo Nordisk (CPSE:NOVO B), Pfizer (NYSE:PFE), Roche (SWX:ROG), Sanofi
(ENXTPA:SAN)
Consumer Health / OTC basket consists of: Blackmores (ASX:BKL), Boiron (ENXTPA:BOI), Church & Dwight (NYSE:CHD), Medifast (NYSE:MED), Nature’s Sunshine Products (NasdaqCM:NATR), Nu Skin Enterprises
(NYSE:NUS), Prestige Consumer Healthcare (NYSE:PBH), Reckitt Benckiser (LSE:RKT)
Source: S&P Capital IQ as of July 19, 2021; Multiples weighted by market cap 22You can also read
